The Broadcasters’ Transition Date Roulette: Strategic Aspects of the DTV Transition James Prieger James.Prieger@pepperdine.edu James Miller JamesMillerEsquire@gmail.com The opinions expressed are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government;
Disclaimers... The opinions expressed are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government. The opinions expressed are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government;
And More Disclaimers... 本資料の位置付け否認の告示 • ここでは、英米法の一般的な解説を述べており 、決して一定の事例に適した法律相談などでは ないことを承知した上で、ご参考にしてください。 本人の見解によるものであり、アメリカ合衆国そ の他の代弁ではないこともご承知下さい。 The opinions expressed are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government;
Presentation Introduction DTV Regulatory Background DTV Technical Issues DTV Markets and Strategic Issues Econometric Primer and Model Data and Empirical Results The opinions expressed are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government;
The Stations Dilemma Furthermore, we expect that many stations will transition early Furthermore, we expect that many stations will transition early and begin operating their final post-transition facilities in and begin operating their final post-transition facilities in advance of the deadline and the onset of the winter months. advance of the deadline and the onset of the winter months. Third Periodic Review of the Commission’s Rules and Policies Affecting the Conversion To Digital Television, MB Docket No. 07-91, Report and Order, FCC 07-228, 23 FCC Rcd. 2994, 3017 para. 41 (rel. December 31, 2007) (Third Review Report and Order) Full-power broadcast stations required to transition from NTSC to DTV by Transition Deadline Stations offered opportunity to go in advance of the deadline Power and other costs incurred prior to completing transition Potential loss of add revenue to competitors for early transition The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
DTV Regulatory Background Spectrum Reform Public Safety Upper 700 MHz Digital Media, Convergence, and HDTV Service Replication/Maximization Grade B Contour Hard Dates (1996 Act, 1997 Budget Act) 96 Act and ATS 5 th R&O 85% Threshhold - 1997 Budget Act Feb. 17, 2009 – Deficient Reduction Act of 2005 Postponement - June 12, 2009 - DTV Delay Act The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
DTV Regulatory Background Early Termination Prior to November 19, 2008 90 day advance filling approval required November 19, 2008 ~ February 16, 2009 Streamlined procedures within 90 days of Feb. 17, 2009 30 Day advance notification of date to terminate Early Termination After Delay “Early Termination” On Feb. 17, 2009 subject to prior rules After March 14, 2009 under 30 day filling and other requirements (Nightlife) The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Technology Opex Concerns Power Considerations Power – Distance Power – Frequency Power - Digital vs. Analog Virtual Channels Flexibility Requirement to Identify as NTSC Channel The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Technology Adoption Concerns Consumer Antenna Analog-Digital Converter Box ATSC Tuner “Hybrid” Devices Coverage and Loss The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Market Dynamics Stations Networks Affiliate ONO Ownership Restrictions Dual-Network Rules The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Econometrics Background Quantitative and Statistical Methods Applied to Economic Principles Understanding Statistical and Economic Significance (independent and dependent variables) Methods Data Sets Regression Least Squares (minimize the sum of squared distances between data points for fit) and Single Equation Simultaneous Equations, Non-Linear and Other Methods Inverse Logistic Function “logit” - logit(p) = l og (p/(1-p)) Probability Units / probits Tobit Model The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Broadcasters' “Prisoners Dilemma” Strategic Considerations Revenue from advertising pq (q station’s viewership) C = F + wx (F includes labor, rent, capital, and other non-power costs, w is the price of electricity, and x is the amount of electricity used) Action “a” available to each station is transition early to digital and stop analog (action a = D), or continue analog broadcasting (action a = A) For station switching early when the other station continues analog broadcasting, assume a known probability that something goes wrong causing an expected fraction i of original qi0 viewers to switch to other station (station risk from action D is losing viewers to the other station) Benefit for the station of transitioning early is the power savings b/c takes less power to broadcast DTV than in analog - x(ai) {xiA,xiD}, with xiA > xiD The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Setting up the Game i = p 0 expected lost revenue from d q i transitioning early A – x D ) cost savings from i = w(x i i turning off analog Station 2 A D 2q20)–C1(A), pq10 – C1(A), p(q10 + A 2)q20 – C2(D) pq20 – C2(A) p(1 – 1)q10 – C1(D), p(1 – pq10 – C1(D), D 1q10) – C2(A) Station 1 p(q20 + pq20 – C2(D) The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Setting up the Game If station 1 expects that station 2 will choose to stay with analog (action A), then (comparing the payoffs to 1 in the first column of the bimatrix above) 1 chooses to coordinate its actions and also stay analog if and only if d1 1 This condition states that station 1 is willing to coordinate on action A Station 2 A D if the expected costs 2q20)–C1(A), pq10 – C1(A), p(q10 + A of transitioning (d1) pq20 – C2(A) p(1 – 2)q20 – C2(D) 1)q10 – C1(D), p(1 – pq10 – C1(D), outweigh the D 1q10) – C2(A) pq20 – C2(D) Station 1 p(q20 + benefits (the cost savings 1) The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Setting up the Game If, instead, station 1 expects that station 2 will choose to switch early (action D), then (comparing the payoffs to 1 in the second column of the bimatrix above) 1 chooses to coordinate its actions and also play D if and only if d2 1. If not, then the expected benefits of letting station Station 2 A D 2 move first (d2) 2q20)–C1(A), pq10 – C1(A), p(q10 + A would outweigh pq20 – C2(A) p(1 – 2)q20 – C2(D) 1)q10 – C1(D), p(1 – pq10 – C1(D), the costs of D 1q10) – C2(A) pq20 – C2(D) Station 1 p(q20 + transitioning and station 1 would play A. The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Setting up the Game Given that the decision facing station 2 involves the same considerations, it is apparent that Nash equilibrium thus depends on the size of i relative to d1 and d2, for i = 1,2. Station 2 A D 2q20)–C1(A), pq10 – C1(A), p(q10 + A pq20 – C2(A) p(1 – 2)q20 – C2(D) 1)q10 – C1(D), p(1 – pq10 – C1(D), D 1q10) – C2(A) pq20 – C2(D) Station 1 p(q20 + The opinions expressed are those of the author and do not necessaricly represent the views of the Federal Communications Commission or the United States Government.
Recommend
More recommend
